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H&E Equipment Services Reports Second Quarter 2012 Results

Forward-Looking Statements

Certain statements in this press release are "forward-looking statements" within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations are forward-looking statements. Statements containing the words "may”, "could”, "would”, "should”, "believe”, "expect”, "anticipate”, "plan”, "estimate”, "target”, "project”, "intend" and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: (1) general economic conditions and construction and industrial activity in the markets where we operate in North America as well as the depth and duration of the macroeconomic downturn related to decreases in construction and industrial activities, and the impact of conditions of the global credit markets and their effect on construction spending activity and the economy in general; (2) relationships with equipment suppliers; (3) increased maintenance and repair costs as we age our fleet and decreases in our equipments’ residual value; (4) our indebtedness; (5) the risks associated with the expansion of our business; (6) our possible inability to effectively integrate any businesses we acquire; (7) competitive pressures; (8) compliance with laws and regulations, including those relating to environmental matters and corporate governance matters; and (9) other factors discussed in our public filings, including the risk factors included in the Company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements after the date of this release.
     

H&E EQUIPMENT SERVICES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (Amounts in thousands, except per share amounts)
 

Three Months Ended

Six Months Ended

June 30,

June 30,

2012
 

2011

2012
 

2011
 
Revenues:
Equipment rentals $ 70,504 $ 55,772 $ 130,133 $ 104,250
New equipment sales 64,704 57,913 105,701 87,086
Used equipment sales 23,588 23,066 50,110 38,483
Parts sales 24,725 24,942 48,103 46,519
Service revenues 13,879 13,244 27,179 25,881
Other   11,624     9,398     21,463     17,024  
 
Total revenues 209,024 184,335 382,689 319,243
 
Cost of revenues:
Rental depreciation 24,763 21,507 47,577 42,070
Rental expense 12,253 11,569 23,796 22,308
New equipment sales 57,633 51,118 93,578 77,148
Used equipment sales 16,405 18,058 35,027 29,620
Parts sales 17,805 18,261 34,734 34,101
Service revenues 5,168 5,137 10,292 10,048
Other   10,762     10,890     20,799     21,037  
 
 
Total cost of revenues   144,789     136,540     265,803     236,332  
 
Gross profit 64,235 47,795 116,886 82,911
 
Selling, general, and administrative expenses 41,399 37,546 82,102 75,639
Gain on sales of property and equipment   641     52     964     149  
 
Income from operations 23,477 10,301 35,748 7,421
 
Interest expense (6,973 ) (7,178 ) (13,843 ) (14,385 )
Other income, net   151     185     508     508  
 
 

 

Income (loss) before provision (benefit) for income taxes
16,655 3,308 22,413 (6,456 )
 
Provision (benefit) for income taxes   6,187     619     7,990     (2,672 )
 
Net income (loss) $ 10,468   $ 2,689   $ 14,423   $ (3,784 )
 
NET INCOME (LOSS) PER SHARE
Basic – Net income (loss) per share $ 0.30   $ 0.08   $ 0.41   $ (0.11 )

Basic – Weighted average number of common shares outstanding
  34,838     34,725     34,822     34,713  
 
Diluted – Net income (loss) per share $ 0.30   $ 0.08   $ 0.41   $ (0.11 )

Diluted – Weighted average number of common shares outstanding
  34,964     34,906     34,957     34,713  
       

H&E EQUIPMENT SERVICES, INC. SELECTED BALANCE SHEET DATA (unaudited) (Amounts in thousands)
 

June 30,

December 31,

2012

2011
 
Cash $ 3,692 $ 24,215
Rental equipment, net 518,425 450,877
Total assets 859,140 753,305
 
Total debt (1) 323,790 268,660
Total liabilities 579,718 489,098
Stockholders’ equity 279,422 264,207
Total liabilities and stockholders’ equity $ 859,140 $ 753,305

(1) Total debt consists of the aggregate amounts outstanding on the senior secured credit facility, senior unsecured notes and capital lease obligations.
               

H&E EQUIPMENT SERVICES, INC. UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Amounts in thousands)
 

Three Months Ended

Six Months Ended

June 30,

June 30,

2012

2011

2012

2011
 
Net income (loss) $ 10,468 $ 2,689 $ 14,423 $ (3,784 )
Interest expense 6,973 7,178 13,843 14,385
Provision (benefit) for income taxes 6,187 619 7,990 (2,672 )
Depreciation 28,079 24,622 54,115 48,317
Amortization of intangibles   25   123   50   247  
 
EBITDA $ 51,732 $ 35,231 $ 90,421 $ 56,493

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